If you donât need the money to live on. Is there an option to open a corp in Cayman island, trade in corp account âand leave the money thereâ? would the money be able to grow tax deferred until you take it out in the US and pay IRS, or I would have to pay tax every year to IRS?
At least in most european countries it is not that easy. You can trade tax free via an offshore company, but when you transfer money to your account you will have to pay CGT. The biggest problem is, that many countries will tax all profits made once you leave the country. Example: trading co year 0: start with 100.000 trading co year 1: 100.000 + 20.000 profit = 120.000 tax free if you withdraw to your private account you will be taxed at that moment. If you leave it there and make another 20.000 profit each year and decide to leave your home country after 3 years it looks like this: trading co year 3: 100.000 + 60.000 total profit = 160.000 You will now be taxed for your total gains you made during the stay in your home country (CGT on 60.000). The offshore company only allows you to delay taxation until you either withdraw or change residency.
Best country for trading is Monaco. No personal income tax, very low corporate taxes, close proximity to London, lots of hedge funds, good legal system, lowest crime of any country in the World. Keep in mind there are many postage stamped countries that will be tax wise suitable but do they have a good working legal system where your rights as a foreign resident protected and relatively less corrupt than usual.
not saying much...with a population of only 35,427. hong kong, with a similarly low crime rate, has a population of over 7 million.
What you did not mention about Hong Kong is the filth, terrible polution, monolingual population, not an independent country and is completely dependent on its symbiotic relation with China. My second choice is Singapore.
Trading from the country of Goldman Sachs is pretty good too. You simply setup accounts using their FEIN number and list yourself as a Citizen Trader (sic). Take your winnings out in cash and let the 1099's go to the country's treasury. They'll take care of everything for you and keep it all confidential and swept off the books and records. You even get your own official GS Monopoly "Get out of Jail" free card. May also want to look at these countries that offer similar rewards and benefits for being a citizen trader (no immigration or green card required) ML ABN HSBC C I understand certain lawfirms and lobbying organizations have also setup their own off the radar islands for trading operations. These too are super secretive but may have a 33% citizen tax
Well, at least if one can get the residency in Monaco and don't mind the cost, life would probably be nicer than in Gibraltar as there is no border check between Monaco, Italy and France. Life would be as much or more convenient than in the other small cities in the same area .One can even avoid traffic jams going in and out through trains. There is a but for french citizens as they are supposed to keep on paying their tax to french authorities, but met a couple of french expats there, and it seems pretty hard for french authorities to know how much a Monaco resident is making. I don't have the stats in hand, but would feel safer in Monaco than in HK, some of the chinese to chinese crime goes unreported in HK, plus the nights get a bit rougher in HK - yet HK does feel rather safe. As of Symbian explaining a EU resident could trade tax deffered through an offshore corporation, if this company is an tax haven with 0% tax on cap gains, I doubt it would work legally in most EU countries, from memory some countries would tax their resident heftily on their corporate offshore profit even before they remit any money. It's worth looking into trading through a HK Ltd as it signed a bunch of tax treaties with european countries which might avoid some hassle, at least it does work for some businesses I'm familiar with - not sure abt equity trading.
Monolingual is an overstatement as most hongkies speak either or both mandarin or english on top of cantonese but it's not the country with the best environment for sure. The local territory is much nicer in Singapore - yet I'd rather be next to Macau and Mainland China as next to Malaysia and Indonesia, plus fopr me at least, there is much more business going on in HK than Singapore. It's rarely mentionned here but expats in China don't pay taxes on their offshore income. Life across the HK border in Shenzhen is nicer (IMO) and cheaper than in HK , plus it's very easy from there to use HK as a logistic center. Expat life is not as lively though and it might be a bit difficult without speaking chinese.